Saturday, November 06, 2010

It would give Canadians a lot more faith in the legal system, if judges were able to apply a new legal concept, the “this’ll teach the son-of-a-gun a lesson” rule. And you can bet that every week, there is at least one judge who yearns to be able to ground his decision using The Starkman Principle.

Throughout Canadian jurisdictions, subject to certain exceptions, when spouses separate the value of their assets accumulated during cohabitation is divided equally. If a wife, for example, has possessions and money worth a total of $250,000, and her husband’s accumulations are $350,000, the husband pays the wife $50,000. This is known as an equalization payment.

Sometimes, as well as determining values, judges are charged with deciding who gets what, if for example some assets are owned jointly by both parties. Of course judges can order chattels and real estate sold, and that the proceeds be divided as the court stipulates. But often a judge will be asked to determine ownership of a specific piece of property, and its fair market value for calculating the equalization payment.

In Riley v. Riley,2009 SKQB 98 (CanLII), a family law case decided last year by the Queen’s Bench for Saskatchewan, one of the more contentious matters resolved by Judge G.A. Chicoine was who would keep the antique Seth Thomas #19 Regulator Clock circa 1904, and at what value. Was it worth as low as $7,000 - $8,000, as Mrs. Riley’s antiques specialist suggested, or upwards $25,000 - $40,000 as Mr. Riley’s appraiser believed?

One would think that with such divergent opinions, Mrs. Riley would have wanted it for herself since she gave it a low value, and Mr. Riley wouldn’t have wanted it. Why? Because Mrs. Riley would only have to account for a modest value on her side of the asset ledger, and Mr. Riley, trying to have it valued at upwards of $40,000, would want his wife to be saddled with an asset valued at a great deal. For example, if $40,000 was accepted by the court, and Mrs. Riley kept the clock, she would have to give her husband a $20,000 credit.

But in this case there was a hitch. Apparently, Mr. Riley also wanted the clock. At least that’s what he told the judge. But if he wanted the clock, why would he have his expert attribute a high value to it? If he won on both counts, that is getting to keep the clock and having his value accepted, it would have cost him dearly. And that’s where poker comes into play. Mr. Riley was, in my opinion, simply toying with his wife, and also with The Court. Just perhaps - he really didn’t want the clock, at least not with a value of anywhere close to the $40,000?

Mrs. Riley’s grandfather bought the clock in a Moose Jaw jewelry store in the early 1950s. It was subsequently given to her parents. After her father died, and her mother moved to home care in 2003, it was put into storage. About a year before her mother’s death it somehow ended up in the Riley home, having been gifted to both Mr. and Mrs. Riley.

The clock was an heirloom, having been in the care of Mrs. Riley’s family for nearly 60 years. But Mr. Riley also claimed some attachment to it, since his father, a professional jeweler, refurbished it after it stopped working, and Mr. Riley himself later spent a great deal of time with the clock, adjusting the amount of mercury in the weights so it would keep proper time.

The judge decided that since it had been in Mrs. Riley’s family for three generations, and would not likely be sold by Mrs. Riley but rather passed on to one of her and Mr. Riley’s children, she should take possession of it … but compensate Mr. Riley for half its value.

Mrs. Riley’s expert, Vern Reese, had valued many clocks in his 40 years as a collector, dealer and appraiser of antiques. For many years his values had been accepted by government for the purpose of providing tax receipts for donations of antique articles. He had been qualified to give expert evidence in many divorce cases requiring antique valuations. In 2006, he appraised the clock at $7,000 - $8,000, if sold at a Saskatchewan auction, and stated that an antique dealer would only be interested if he could double his price. By the time of trial Mr. Reese acknowledged that the Seth Thomas clock might be worth $10,000.

Mr. Riley’s expert, Forster Monson, was a Certified Personal Property Appraiser, with no particular expertise in valuing clocks, but stated that for clocks he would apply the same methodology as used for other chattels … finding comparables. In 2007 he valued clock at $25,000 USD, using comparables found on the internet. However, the printout attached to his appraisal report showed that the pages were printed by Mr. Riley, suggested that Mr. Riley had done the search. Mr. Monson also relied on a conversation with a clock dealer in Saskatoon who was familiar with this particular clock. He said the dealer believed it was worth $25,000 - $40,000, and that at a reduced price he would be interested in buying it. However, it turned out that the dealer was an acquaintance of Mr. Riley.

Judge Chicoine decided that Mrs. Riley’s expert’s opinion should be given more weight than that of Mr. Riley, and that the clock should be valued in the Saskatchewan market since neither party intended to remove the clock from the province. On the basis of all the evidence, he attributed a value of $10,000, to the 100-year-old clock.

It can be argued that Mr. Riley had been expert-shopping, and took steps to influence the value that Mr. Monson attributed to the clock. And that as indicated above, he really wasn’t interested in keeping the clock … at least not at the value at which his expert pegged its worth.

Mrs. Riley got what she wanted, and at a price with which she could surely live. But within the context of an acrimonious matrimonial dispute, don’t you think she would have been more than a little content, and justice would have equally prevailed, if the judge had awarded the clock to her husband, accepting his highest value of $40,000, using The Starkman Principle? After all, what could Mr. Riley complain about? He wanted the clock, and the value for which he would have had to account to Mrs. Riley had been proposed by his very own expert. And the fate of the antique Seth Thomas clock? On balance it still would have stayed in Mrs. Riley’s family, at least for a fourth generation, being willed to one of the three Riley children by their father.

Alvin Starkman received his Masters in Social Anthropology in 1978. After teaching for a few years he attended Osgoode Hall Law School, thereafter embarking upon a successful career as a litigator until 2004. Alvin, a good-standing member of the Law Society of Upper Canada, now resides with his wife Arlene in Oaxaca, Mexico, where he writes, leads small group tours to the villages, markets, ruins and other sights, is a consultant to documentary film production companies, and operates Casa Machaya Oaxaca Bed & Breakfast.

The Ontario Human Rights Tribunal has ordered National Money Mart Company to pay $30,000 in compensation to a former, one-year employee of the company who had been subjected to ongoing, serious sexual harassment by her workplace supervisor.

With the Ontario Court of Appeal's June 25, 2009 ruling in Slepenkova v. Ivanov, it is now clear that the nearly-universal pronouncements by management lawyers as to the death of Wallace damages after Honda and Keays may have been a bit premature.

In Slepenkova, the Ontario appellate court upheld a two-month notice extension for an employer's bad faith termination, even though no evidence was led at trial as to the specific damages the employee directly incurred as a result of the bad faith. This appeared to place the trial Judge's decision at odds with the new Wallace test set out in Honda.

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Garry J. Wise is primary contributor to Wise Law Blog. He is a Canadian litigation lawyer who practices with Wise Law Office,Toronto. He is a graduate of Osgoode Hall Law School and was called to the Ontario Bar in 1986.

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